Blog Post

Why Windows Mobile Is In Trouble

Recently it was revealed that the newest version of Microsoft’s mobile operating system, Windows Mobile 7.0, would be delayed until as late as 2010. The updated version, which the company’s partners had reportedly been hoping to have by early 2009, was aimed at giving Microsoft a bigger presence on the mobile stage. But delay or no delay, I don’t think it would have been enough. With competition from a resurgent BlackBerry platform from Research in Motion, Apple’s iPhone and most importantly, the Google Phone platform (I will analyze Nokia’s Symbian platform in a separate post at a later date), Microsoft’s mobile platform is facing its toughest environment yet.

I’m not saying that Windows Mobile is no longer relevant. What I am saying is that Microsoft’s grand mobile ambitions might have to come down a few notches. Just like open-source server software made it impossible for Microsoft to extend its stranglehold to servers and the back-end infrastructure business, these newer mobile platforms will act as speed barriers to Microsoft’s mobile ambitions.

Research firm Gartner recently released smartphone market share data for the second quarter, and some of the numbers were pretty astonishing. RIM’s market share surged 126 percent over the second quarter of 2007, to 17.4 percent. For the same year-over-year period, Apple’s OS X platform rocketed higher by 230.6 percent to encompass 2.8 7.3 percent of the worldwide market. Symbian was flat, and Windows Mobile market edged up a mere 20.6 share to stand at 11.5 percent for the period.

Notably, this was before Blackberry figured out its game and announced a slew of devices, among them its new flip phone, aimed at higher-end consumers. A bunch of others, like the Bold and the Storm, will soon be released in the U.S. as well. And Apple continues to wow with its iPhone. But none of those present the most immediate threat to Microsoft’s mobile platform — that comes from Google’s Android.

Over the weekend, rumors began surfacing that T-Mobile USA had pre-sold nearly 1.5 million units of the Google Phone, the G-1, made by handset maker HTC. After seeing the phone up close and personal, I’m not at all surprised.

A few weeks ago, I moderated a panel in Boston that included Rich Miner, group manager of mobile platforms at Google and one of the co-founders of Android, a startup that Google acquired in 2005. Android, of course, has become the underpinning of Google’s assault on the mobile industry.

Miner, who was a keynote speaker at our Mobilize conference, let me play around with his Google Phone. Since I wasn’t able to attend the launch event in New York, it was my first interaction with the device whose existence and emergence over the past few years we have closely followed.

It didn’t take long for me to conclude that the device was well designed, sturdy, fast, easy to use and very intuitive — many of the same sentiments already expressed by experts such as Walt Mossberg of The Wall Street Journal and über gadget blogs Engadget and Gizmodo. (Of course, we share similar concerns as well.)

What I don’t believe is that the device will have a major impact on Apple’s iPhone. The two have a lot in common the way a Mercedes and a Toyota truck have a lot in common: While they contain some of the same basic features — in this case a touch screen, an application framework that draws inspiration from their web peers and a near-identical Webkit browser — the user experience on the two devices is markedly different. In other words, the companies are going after different market segments.

Google’s Android, in my opinion, is a direct competitor to Windows Mobile. Put another way, it’s Windows Mobile done right. I say this because I have tried dozens of Windows Mobile-based phones and their user interface always leaves me feeling like someone with multiple cuts being submerged in salt water. Don’t get me wrong – I think Windows Mobile as an OS has come a long way since its early, awkward roots. It’s just that the new guys are better. A lot better.

In fact Miner, when he used to work at French-owned mobile carrier Orange, was one of the people who helped introduce a customized version of a Windows Mobile-based HTC device there. The experience with Windows Mobile left him so frustrated that he convinced Andy Rubin to team up and build the Android OS.

Sometime later this month, the G-1 will go on sale and people (at least those in the U.S.) will be able to experience the difference between a Windows Mobile- and an Android-based phone for themselves. Of course, some will find the shortcomings of the Google Phone — and according to Mossberg, there are many — grating. Others, like me, will be suitably impressed. And if they’re impressed enough, most handset makers will want to join the party.

So is Windows Mobile a lost cause? Absolutely not: Microsoft still sells millions of devices based on this platform, has brand-name mobile phone makers as partners and, most importantly, the ability to spend seemingly endlessly. They could start by buying browser maker Cellfire Skyfire to make up for Internet Explorer Mobile. And they could hammer home the advantages of Mobile, like how easy it to run VoIP and other applications such as Skype, or how it can work seamlessly with Microsoft Exchange. That will at least keep them on par with their upstart competitors.

In order to cut costs, Microsoft has stopped the practice of reimbursing eligible employees for mobile phones. Under the prior plan, the phone could not be a smart phone other than an Windows Mobile device.

The prior plan enabled many employees to purchase a Windows Mobile device costing upward of $300.00. Now lacking this enabler and considering that itâ€™s their money, many employees are flocking to iPhone for the simple reason that it is the better (and cooler) device (even with the lack of multiple carriers). One such person was caught taking a picture of Steve B at the company meeting in September, Mr. Ballmer pretended to step on the poor guy’s iPhone and keep it until the end of the event.

In defense of Microsoft, the possible failure of Windows Mobile is a collaborative effort that includes the Teleco companies and phone manufactures. These companies just slowed innovation and increased cost by adding its own redundant/worthless services and features.

Yes Virginia, Windows Mobile is in trouble but there is hope if Microsoft follows a simple three step plan:

1. Leverage the Zune-HD platform â€“ Hereâ€™s is a platform and online service that can compete. However, keep it simple stupid â€“ bar any â€œexpertsâ€ from making any design decisions leading to 30+ sub-par phones instead of a few really good ones.

2. Start with a single trusted carrier and own the platform â€“ Recognize that these guys sell minutes – not phones or services!

3. Market effectively â€“ Simply building a better (or just as good) platform still requires effective marketing. Be creative and focused with your advertising and donâ€™t hide the Zune from the public. It has gotten much better; just keep on doing the right things.

I have a Blackberry Bold, A 3G iPhone and a Touch Diamond so I feel that I can make this comparison as I use all three daily. The person who stated about the openess of the WM operating system is very true and the fact that it can do all the thigns the others can do, even if it might get beaten in one area by others.

I have only played with the G1 belonging to my friends so I cannot fully comment but so far it just seems like a more stable version of WM but to me its at its early stages with apps.

I have a wealth of WM devices since I moved from the Sony Ericcson P910i to WM and I have always used customized ROMs that make full use of the operating system. I am currently in love with the Diamond and want the Touch HD, which is just a bigger, better version with a beautfiul HD screen!

The iPhone is the best for media such as music(thanks to the iPod), and the games are amazing, DS quality and the displaying of web pages but it always crashes out and multitasking…forget about it.

I just cannot wait to see what comes next, I am looking forward to the Palm Pre

The Apple iPhone is still the Gold standard in the smartphone space. I am still in shock that a small company that never made a single phone before totally shamed all those well established phone makers who have been at it for so many years. All I can say is that there must be a lot of very very bad engineers at those other mobile phone companies, what have they been doing all these years? IMO the Apple iPhone is the greatest phone that has ever been made, Period. End of Sentence. I actually wish that somebody would make a better phone because competition is always good. Unfortunately, it looks like most of these companies are just trying to emulate the iPhone instead of trying to leapfrog it.

I was curious about the G1 until I heard about their Apple-like kill switch. I will not ever buy a phone that anyone can remotely uninstall something I’ve installed, ever.

As for WM, as I’ve said on here plenty of times my WinMo phone is fantastic. It has more features than any other mobile OS (especially the iphone) and the interface works great because I have total control over it unlike other interfaces (especially the iphone). Growing 20.6% is not an indication that WM is in trouble. Maybe the story should be about the OS that had negative growth.

Om – I’m betting right behind you. Apple will beat Google for the next 2-4 years.

Can’t count RIM out either, even though their products may now be the DOS of the smart phone world. I’ve placed two bets on RIM puts in the last few years. Made money each time, but didn’t prove my thesis on either, and each time I walked away thinking I should never go short again on such a good management team. Still can’t believe they’re worth $35 billion (let alone $100 billion a few months ago).

Yet my Windows Mobile experience on a Samsung I780 has been unbelievable! Seems like it is easy to take jabs at Microsoft all the time but I believe Windows mobile is an excellent platform. A major problem however is Microsoft’s hands-off approach to upgrades and the software eco-system. It is a major disappointment (unless one knows their way around forums and manaufacturer support sites).

Om, since WM is built for different device profiles, it is expected that a generalized view of that platform falls short. There is the G1, the iPhone and Windows Mobile Phones (Hundreds of them). If there is going to be a one-on-one comparison, then there should be a particular Windows Mobile phone as the WM device.

Generalized comparison at this point has to be at the Operating System level: Windows Mobile 6.1 versus Android OS versus Mac OSX.

This post has been submitted from a PC using the excellent Windows Mobile Internet sharing via bluetooth ;) This, among other impressive features (Office, Exchange e.t.c) has gained my respect for the WM platform.

Once again, pitting G1 against iPhone is utterly pointless. Remember how google earns money (hint: not through android sales). iPhones has Gmail, Gmaps, youtube and google search integrated well into the iphone. Google has no problem with the iPhone and is not targeting it. All google wants is to make sure its services are accessible to mobile, hence the huge android push to open up the competition. It worked with Symbian. I too expect MSFT and RIM to get cosy, simply because MSFT has no other choice besides Palm (and we all know what Palm is worth).

I have a HTC winmo phone from verizon. It sucks(yah i can say that without going into any detail). I’m just not a fan of winmo at all. HTC phone is pretty solid though.

I have preordered the G1. Like many geeks out there, I can’t freaking wait to get my hands on this phone. I’m a child of the Internet and I grew up on Google. Having all my Google services in the palm of my hand is my biggest wet dream.

Everyone has seen how the iPhone change mobile phones. Android is like taking the beast out of the cage. The whole OS is freaking open. Its all about the developers and the devs will flock to Android once they see what it can do.

I guess it is the same thing with Microsoft and Apple. Each one is essentially doing the same thing for two different markets. If I was a betting man, I would bet on Apple for sustained profits from its iPhone line and market share from Google. Of course, in time it will be known if I made a sucker’s bet or not.

Google and Apple not going after the same segment? Is Apple going after prosumer aesthetes, leaving Google the prosumer/ugly-forward segment?

Michael Martin seems right that Google looks at the G1 mainly as a development mule, but I doubt that poor T-Mobile launched a phone for 2,500 people spread over California, Texas and Washington. Include Amazon’s MP3 service as the exemplary in-box app just for geeks? Don’t think so.

No, Google and Apple are going after most of the same people, just with two different approaches, two interpretations of the same thing, one from an engineer, the other from an architect.

The 1.5 million figure for G1 is a travesty of tech reporting. It was essentially made up in one Motley Fool article, and then endlessly parroted by the tech sites. Please, please, please take 5 minutes to really look into it. Contact the author of the original source story for that, and please help me get beyond the tech echo chamber.

I agree that Android is the biggest threat to MS however most (assuming) WinMo users are corporate users that probably DON’T LIKE CHANGE when it comes to a device they’re required to lug around due to their job, even if it is for a better user experience.

Granted more tech savvy people will try something new but I doubt that the average middle to upper level management will willingly seek out a new device that they have to learn.

Despite your door and gloom, I suspect you will find that Q3 numbers will look a lot better than Q2. Q3 saw the release of a number of amazing Windows Mobile phones, like the HTC Touch Diamond, which is selling quite well.

You intentionally omit discussing Symbian, but Windows Mobile gained market share while Symbian lost it. Does this mean Windows Mobile 6.1 is a better OS than Symbian, or does the sales numbers not actually tell you anything about the quality of the software?

Also its often written that Windows Mobile is losing marketshare to the iPhone, but in fact the numbers do not support that.

What happened to the “Give Microsoft 3 versions to get it right” rule of thumb?
I’m really amazed sometimes. They are spending $7 Billion on research a year, what are they doing? I contacted Steve Ballmer a while back, 2 days later I was in contact with a Microsoft lawyer. So not only do they have incredible internal research resources they also have access to outside research. Ok, in my case it was, “You want me to sign what!”. Maybe that’s it, to many lawyers.

The G1 is simply the geek phone for programmers to plug away on to create the applications for the masses so that future Android phones will be more user friendly and engaging for a larger consumer crowd.

Microsoft would have served themselves a lot better by delaying Vista and concentrating a lot more resources on Windows Mobile — both products would likely have been better for it. I get the impression that WM is still the red-headed stepchild within Microsoft. I probably doesn’t help that the customers championing improvements to the desktop OS are Dell, HP, and Acer, while the main WM customer is HTC . . .